Going self employed

[Johnny Mars Bar]

One other quickie which I'm sure your dad will mention when you see him. On the off chance you are looking to refinance/do something on the mortgage front in the near term...unless it's changed it can be a bit of a pain to do this when your business is in its early stages and you don't yet have 2 or 3 years proof of a decent income stream. So factor in timing for any stuff like that.

We refixed for five years the *day before* Kwasi Kwartang’s financial suicide bomb budget!

 

[Citizen of Legoland]

Lots of useful stuff here. I need to look into the IR35 thing as it sounds like it will be relevant.

No need to bicker - all the info in here is really appreciated.

Yes the terms will all look weird at first but you’ll realise eventually there’s nothing too complicated. IR35 is just a way of ensuring companies do not abuse laws intended on protecting the general workforce and avoiding tax so is a good thing really.

 

[tolmie's hairdoo]

As long as you don't work exclusively with one company, you are outside IR35.

That's what every accountant I have used has said.

I have gone from Ltd status back to self-employed/self assessment and while it has been almost a three year (painful) liquidation process, I don't miss it.

No more quarterly VAT returns, being an unofficial collector for the tax man getting to keep 1.5% of it on the flat rate scheme.

No more more monthly PAYE runs.

No more tax on dividends and the measly £2k threshold.

Just back to keeping my petrol receipts, invoices and bank statements, passing the lot to my accountant every April.

Lot to be said for earning less than I did before.

More money, more problems, bigger accountancy fees!

Good luck. Worked for myself for 28 years. A lonely experience at times, trying to chase people for money and it takes an iron discipline to keep going.

On the flip side, you keep your own hours and I got to pick my kids up from school everyday and be there for my wife and them.

Can't put a price on something like that.

 

[Citizen of Legoland]

As long as you don't work exclusively with one company, you are outside IR35.

That's what every accountant I have used has said.

I have gone from Ltd status back to self-employed/self assessment and while it has been almost a three year (painful) liquidation process, I don't miss it.

No more quarterly VAT returns, being an unofficial collector for the tax man getting to keep 1.5% of it on the flat rate scheme.

No more more monthly PAYE runs.

No more tax on dividends and the measly £2k threshold.

Just back to keeping my petrol receipts, invoices and bank statements, passing the lot to my accountant every April.

Lot to be said for earning less than I did before.

More money, more problems, bigger accountancy fees!

Good luck. Worked for myself for 28 years. A lonely experience at times, trying to chase people for money and it takes an iron discipline to keep going.

On the flip side, you keep your own hours and I got to pick my kids up from school everyday and be there for my wife and them.

Can't put a price on something like that.

The top one is not correct any more, the rules changed in 2017 for public sector contracts and 2021 (I think it was) for the rest. The company who the contractor will be working for determines what status the contract falls under UNLESS said company is classed as small (about £10M annual turnover or less) where the contractor makes the decision.

 

[Bluetobits1951]

did it 35 years ago - never looked back

Limited Company + accountant - Join LinkedIn + create a web site to build a client base

 

[tolmie's hairdoo]

The top one is not correct any more, the rules changed in 2017 for public sector contracts and 2021 (I think it was) for the rest. The company who the contractor will be working for determines what status the contract falls under UNLESS said company is classed as small (about £10M annual turnover or less) where the contractor makes the decision.

Thanks. I work for some very large media companies but not one has mentioned my status with them.

As a freelancer who doesn't rely on just one outlet, I only get paid if they choose to use it and a self-remittance invoice is generated by them and sent to me accordingly each month?

Said companies being worth billions.

Anything to worry about?

 

[Citizen of Legoland]

Thanks. I work for some very large media companies but not one has mentioned my status with them.

As a freelancer who doesn't rely on just one outlet, I only get paid if they choose to use it and a self-remittance invoice is generated by them and sent to me accordingly each month?

Said companies being worth billions.

Anything to worry about?

Probably not, different industries/jobs, different risks. Re-reading your original post and it may be that in your case the accountant is confident that as long as you work for multiple clients at the same time you’ll be safe and actually it is a good test for every contractor. In IT I get all my Outside IR35 contracts checked by tax specialists so nothing can come back to me but my industry has a lot of blurred lines between contractor and employee. It may be different for your industry/specialism.

 

[Johnny Mars Bar]

Can someone explain the benefits / drawbacks of being in and out of IR35?

At the beginning at least, my current employer are likely to be my biggest client. My plan is for this to be the case for the first year or so while I find my feet and build a more diverse client base.

They are a limited company (and a registered charity if that matters?) with a turnover of less than £10m.

 

[OB1]

Can someone explain the benefits / drawbacks of being in and out of IR35?

At the beginning at least, my current employer are likely to be my biggest client. My plan is for this to be the case for the first year or so while I find my feet and build a more diverse client base.

They are a limited company (and a registered charity if that matters?) with a turnover of less than £10m.

There are potential tax advantages to not being under IR35.

Using a good accountant is the sensible thing to do. I am a qualfied accountant but when I was contracting through my own limited company, I used a firm of Chartered Accountants to prepare my statutory accounts and handle my payroll and tax; not because I couldn't do it myself - I had previously done that for several years but for several reasons, primarily reducing the risks associated with making errors on tax matters, I changed to using an accounting firm.

I stopped contracting just before the pandemic and hope I never have to go back to it (I''m back to being an employee).

One thing peple should note is that IR35 is a company to company thing but just because you don't work through a limited company, doesn't mean you cannot be deemed an employee for tax.

 

[Eds]

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